The fate of the R7 photoreceptor cell in the developing eye of Drosophila is controlled by the Sevenless (Sev) receptor tyrosine kinase. Sev activates a highly conserved signal transduction cascade involving the proteins Ras1 and Raf and the Rolled/mitogen-activated protein (Rl/MAP) kinase. Here we show that the ETS domain protein encoded by the P2 transcript of the pointed (pnt) gene is a nuclear target of this signalling cascade which acts downstream of Rl/MAP kinase. The PntP2 protein is phosphorylated by Rl/MAP kinase in vitro at a single site and this site is required for its function in vivo. Furthermore, we present genetic and biochemical data suggesting that MAP kinase controls neural development through phosphorylation of two antagonizing transcription factors of the ETS family, Yan and PntP2.